Dems: House GOP’s Stimulus Plan Would Actually Raise Taxes For Many Americans
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GOP leaders — led by John Boehner and Eric Cantor — have spent days bashing the economic stimulus package being touted by President Obama and Democrats because it doesn’t sufficiently cut taxes.
But is it possible that the alternative plan House Republicans unveiled as a more responsible approach earlier this week would have actually raised taxes for untold numbers of Americans?
That’s the surprising claim that House Democratic staffers who have taken a look at the GOP plan are now making. They insist to me that the Republicans did some almost comic number shuffling in drawing up their proposal, the upshot of which would be that the actual tax bill would go up for many.
And they’re now preparing to make an issue of this in the districts of Republican House members by painting Republicans as the would-be tax hikers.
This is a bit in the weeds. But here goes. According to Dems on the House Ways and Means Committee who have crunched the numbers, the GOP plan, which would reduce income taxes, would as a result shove millions over on to the Alternative Income Tax rate, which would be higher for them. Dem Ways and Means spokesperson Matthew Beck emails me this statement making the case:
In 2008, 4.2 million Americans had to pay the Alternative Minimum Tax (AMT). The Republican proposal would lower marginal tax rates for individuals, but would not reduce AMT rates. Current law requires you to pay the greater of the two rates, so many of those receiving this lower marginal rate would now be held liable for the AMT.
There is no question that Congress needs to — and will — act to prevent the number of taxpayers hit by the AMT from growing to an estimated 26 million this year. However, we confirmed with the non-partisan Joint Committee on Taxation that 26 million people would still be forced to pay the AMT this year under the GOP bill. Essentially, their tax bill would give with one hand and take away with the other, leaving 26 million families without the tax cut they promised in their bill.
Make of this argument what you will, but the fact is that this is going to be an official attack line coming from the DCCC, which is right now drawing up press releases to push this line in the districts of at least a dozen House members across the country who backed the GOP alternative. The hits accuse each member of voting “to raise taxes on 22 million hard working Americans.”
I’ve checked in with the staffers in GOP Rep. Cantor’s office, who will undoubtedly be eager to explain why they see this as completely bogus, and will update when I hear back.
Update: Cantor spokesperson Brad Dayspring emails over this response:
These are the type of untruths spread by House Democrats that continue to undermine President Obama’s desire to work together to provide real solutions to the challenges faced by hardworking Americans. This is nothing short of a total fabrication, as there will be no more people subjected to the AMT under the Republican jobs plan than the Democrat spending bill. In fact it is likely that the Republican plan would subject less to it.
The truth of the matter is that both plans address the AMT and were written under the assumption that the regular AMT patch would be passed by the end of the year, just as Congress has done this entire decade. The very fact that the Democrat Ways and Means Committee is so obsessed with discrediting the Republican plan to create jobs instead of promoting their own spending plan brings into question their motives.
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Ah, this is great! Can’t wait for the fireworks over this.
LOL See what happens when you can’t leave well enough alone. It wasn’t enough for the Rethugs to vote against the bill, nah they had to try to embarrass the dems with hyperinflated claims about THEIR plan. They are going to get beat down by their constituents because really, if you can’t’ count on Republicans to cut taxes what other possible redeeming quality do they have?
I’m guessing that the GOP answer will be that if your current tax liability is $1000, your AMT calculation is $900 and the proposed rate yields $800, your taxes go down $100. It’s not a tax increase. It’s merely not as large a decrease as the proposal makes it look. Or am I missing something. I mean, if the AMT doesn’t change, your tax liability won’t go over that $1000, can it?
Expect Cantor to lie, as usual.
Greg – Do you know why when I click on “unveiled” I go to “Earthshare” website? If I click on “approach” at the end of the link, I go to Fox.
By the way, if I click on “responsible” I go to a Honda website.
I’m with Danp — where is the increase?
Sure it’s not as big as they claimed, more underhanded mischeviosity…but…
Danp let me check into that tech stuff. re the increase, my understanding is that it’s impossible to nail down precisely how many of these would be increases but at the very least some of them would be.
Now get every Dem out there on interviews with the media and push this as hard has the repubs have pushed their hooey about the stimulus. the dems just lay down and let the gop control the media, it’s time they did the same.
“There is no question that Congress needs to — and will — act to prevent the number of taxpayers hit by the AMT from growing to an estimated 26 million this year.”
from the sound of that it appears that the AMT could increase for these folks no matter which “stimulus” bill we are talking about. Did the Obama plan do something about it? no? hmm
hey all, open thread is up
http://theplumline.whorunsgov.com/uncategorized/happy-hour-roundup-5/
g
It’s obvious how this type of ‘mistake’ can occur…. bear with me.
Republican ideology is tax cuts for the wealthy / big business. That’s what would have been the basis of their ‘alternative stimulus’ and that part of the proposal will be word perfect and watertight.
Tax cuts for lower paid workers would have been added just to make it appeal more to the general public. Items thrown in like this just to dress the bill up as ‘all encompassing’ are never given the level of scrutiny that the important parts are (aka the tax cuts for the rich).
This is amazing, the loosing party , GOP Members of the House , go and write there own stimulus plan, line with TAX CUT, TAX CUT and very LITTLE to fix falling bridges, crumbling schools, train new teachers and increase their salary etc. Failing to recognize that their way of doing business for the last 8 years has been REJECTED on Nov 4th by the majority of the American people. Cantor, Boehner and the rest of the SOUR PUSS Bush Republicans, need to be taught a reality check lesson!
Keep using your blocking strategy, it’s sure to give the Democrats a bigger majority after the mid-term elections.
Page 10 & 11 of the House Resolution Bill sent from the House to the Senate clearly shows that 233 Billion of the total over 8 trillion package goes just to distribute & monitor the the remaining monies. That’s 27% of the stimulus package going just to administer it. Seem to me if that money was sent to Businesses instead of Government that most of that mony could be put to better use.
So let me see if I got this straight:
1) The GOP “analyzes” the Dem Econ Stimulus Package using an early and incomplete version of a CBO report.
2) They go on National TV and claim that the Congressional Budget Office showed that the DESP would fail.
3) Every reputable Economist acknowledges spending will have twice the job creation of tax cuts, not withstanding a few Cato institute cretins and Chicago “I forgot Econ 101’s lesson that money has velocity” professors.
4) They telegraph that their strategy is to claim Obama fails in 6 months. They also hail ‘bipartisanship’ and then…
5) Vote in mass against the DESP claiming tax relief is more effective than gov’t spending at job creation, that condom makers don’t employ people, and pregnancy doesn’t impose a cost on families…
6) The MSM accidentally catches them with no clue as to what to do for recovery.
7) So the GOP leadership puts together their one-note-Johnny-off-key-but-we’re-not-listening refrain of “Let’s lower taxes” as a stimulus package.
That’s the modern GOP for you: So incompetent and dishonest it takes a spreadsheet to keep track of the lies and ineptitude.
Cantor lies about his intentions just about as well as he lies about his sexuality —
poorly.
My first visit to your new home, Greg, and I love it.
BTW if I were a preening, demanding, drama-inducing diva, I would want my personal assistant to be named Brad Dayspring. Oh wait…
If the Repubs have such good ideas, where have they been
when they & Bush got us into this mess?
I love it . Republicans watch what you ask for. The Republicans wished they had ran a woman for president, so they castrated John McCain.
They’re idiots, and consistently demonstrate that fact. All they have left to defend them is Limbaugh and Colbert (two comedians): http://videocafe.crooksandliars.com/heather/colbert-report-word-audacity-of-nope
First of all, the Republicans have squandered any credibility or competence on the issue of managing the economy. Secondly, they have a serious issue re motivation behind every thing they do or say. Thirdly, they have no leadership ability. I cannot believe anything that exits their mouths anymore. They do have an amazing “hubris”, basking in the generosity of a new President who attempts to treat them in a civil manner, yet not knowing even how to behave. They are immature, irresponsible, and liars. We, the voters, rejected their economic plan in the election. What makes them think we want it now?
so they shoveled the money over to make the books work? that is revenue will remain steady knowing that this is untrue due to the amt patch?????
They are going to get beat down by their constituents because really, if you can’t’ count on Republicans to cut taxes what other possible redeeming quality do they have?
Posted by: sgwhiteinfla | January 30th, 2009 at 05:30 pm
———– They squeal well when you use them for Pinatas??
I’m more concerned about their proposal to cut the “payroll tax” on businesses. ASFAIK that’s the match on Social Security, the employers contribution to State and Federal Unemployment Insurance, and the contribution to Medicare. These are ultimately “employee” benefits (when retired, furloughed or laid off) that would then transfer to the pocket of the employer. A massive windfall, and one that by no means compels the employer to do anything to reinvest in business growth, improve salaries, or other actions that might stimulate the economy.
In addition it would likely accelerate the timetable for a Social Security and Medicare crisis…to a few years. And Unemployment Insurance pools would likely be emptied almost immediately. Protection would have to be cut to a few months, then weeks.
GOP, please leave governing to those who are capable. Make your speeches and sit down. The country needs capable politicians, not Republicans like Bush et al
Where McCain, he needs to fly in to DC, smile and leave?
Can the repub be this useless? Pick apart somelse paln , yet your plan sucks. It is amazing, how lost the GOP party? Bush came to the WH with 120 billion surplus budget from Clinton, and leaves AMericans 8 years later, with a deficient and recession. Now GOP want to obstruct Dems from repairing it.
And Cobert doesn’t count, because he actually is making fun of them.
Anybody can see that the Rethugs are trying to do anything to avoid spending collective money (ie.. what is gathered via income and other tax) when it comes to the welfare of the nation. The Rethugs want to tax the poor more and the rich less, to pay for more CORPORATE WELFARE. On top of that they want to continue the game so that all of their rich, kniving, no good, lying friends and elite (and themselves) get more filthy really rich while they spend atrocious amounts of other peoples’ money that they stole via the corrupt stock market on their wall street parties –six houses and five cars. REMEMBER it was the republicans who had twisted and changed the regulations that govern the MARKET –especially over the last 8 years, but also during the Reagan era. The Rethugs also changed the rules re: Fillibusters right on the floor of Congress back in 2004 to hog tie the DEMS while they continued this treasonous rampage on America (The next election 2006 saw a few rethugs lose their jobs). I hope to see more of them fall next time round. (keep it up Limpaw, shout it all out, I like to hear you expose yourself as the anti -patriot that you reallly are)
The government has been loaning the banks since late 2007, the treasury dept changed the rules to allow this, and the banks had borrowed apx. 1.2 TRILLION dollars PRIOR to the CRASH in Sept 2008.
The ones in the know —knew all along the crash was coming. Now they want us all to pay for it. Follow the Buck(s), and you will tie it back to Bush/Shamey and friends.
The response email states that the repub. version of the bill is better…. on the ASSUMPTION that a trailing piece of legislation could be passed by the end of the year regarding the alternitave minimum tax. Dupe a coupla DEMS or fillibust, and WALLA take MORE from the poor to give more to the rich. They just cant stand the fact and think it unfair that they should have to pay anything or lose anything even though they caused this huge mess. U.S. hard working americans cannot afford to buy billion dollar jets and cuban cigars, or fine brandy– Most of us have kids to raise. THEY have ran the Board long enough. Enough is enough. GOBAMA.
Sorry, but the math here doesn’t make a lick of sense to me. As Danp suggests, if you are required to pay the “greater of the two rates,” then when your rate decreases, and you move to the AMT, your tax rate is still decreased as what was once the lesser of the two rates is now the greater of the two. Let me simplify:
Say my tax rate dictates that I pay $1000 in taxes, and the AMT is $900. The greater of the two is $1000, so this is what I pay.
Now say that under the GOP plan my rate is reduced to $800, but the AMT remains at $900. The greater of the two is now $900, so this is what I pay.
It’s not the $200 rate cut that I may have hoped for, but it’s still a $100 rate cut. It’s certainly not an increase. What am I missing?
jeremyemilio Your math is correct,however,consider… I tell you “Your tax is now $1000,I will make it $800″ …$200 tax cut yipee! April comes,so you file your taxes. WTF you want $900? Not really a tax increase but certainly not what was promised,was it?
fools all around. our government (both dems & reps) collectively can’t spend the tax money we already send to them. yet u geniuses believe that one party can solve the problem ostensibly by spending more money that we don’t have ( funny, they just print money and we wind up paying interest to foreign entities that hold our treasuries) The liberals embracing keynesian economics? no sarcasm required. Alright, i’ll bite, lets give them more of our money to waste so all of you can be taken care of and congratulate our unaccomplished Dear Leader. let me preempt the “what did bush do” response. he spent too much money. so we remedy the situation by spending even more money. teach your children that one with a straight face.
The GOP has no credibility when it comes to fiscal responsibility. ZERO. Can you say Halliburton and Blackwell? Give me a break. These clowns think we will forget the damage they have wrought upon our international, domestic and economic credibility. They ought to be begging for forgiveness instead of waxing rhapsodically and trying to be sanctimonous.
Raise taxes, lower taxes the average American does not really care which. All we want to see is the economy improve, people going back to work, foreign tax shelters siece, loss of jobs to foreign contries stop.
We are tired of seeing out retirement benifits dwindle, while the elected officials have guaranteed retirement incomes. We are tired of not being able to take our families out to eat occasionally while the DC crew eat out daily, we are tired of wondering how we are going to pay our car note while they ride around in a car paid for by us.
Nope, these people do not have a clue as to how to solve this poblem or do not care.
Example, the bank bailouts, then the banks using the money to buy Jets, give millions of dollars of bonuses, remodling offices and only God knows what else.
Until WE THE PEOPLE make it clear to these dirt bags what we want it will continue.
What makes ANYONE think that anything is going to change until WE THE PEOPLE tell them what we want.
Does anyone in America really realize what a tax increase or decrease to a person in the 55 M and lower income range would do to help or hurt them.
ABSOLUTLY NOTHING.
Lets tell congress and senate to get off this bickering and solve the f*****g problem.
Here’s what really has me scratching my head. The Republicans have this “great” package and wants the President to go with it. Well then why did they wait until the day of the vote to roll it out? They knew this was coming since November 4th, so why not share anything until the end of January? It’s their typical attempts of slight of hand. They actually have nothing.
jesterband (11:51) – I buy your logic, but I don’t think you can honestly call that an increase. I suspect that the Dem argument is more along the lines that the AMT temporary fix is due to expire at some point, and then, many people who benefit under the Republican proposal will experience an increase. I honestly don’t know whether the Dem proposal has some built in immunity from that. But then, I get kind of ticked off by the argument that the AMT prevents people from using too many deductions. The AMT already has built in exceptions. For example, you can deduct mortgage interest on your home to lower even the AMT due. You just can’t avoid taxes entirely by giving all your income to charities.
hey all, thanks for this great thread. I wanted to remind you of the homepage of this blog:
http://theplumline.whorunsgov.com
I’m hoping you’ll all stick around and comment endlessly. I’m hoping to turn this site into the preeminent discussion site about the new Democratic order in D.C.
One little gambit we lose sight of in the discussion of reducing taxes goes beyond the greed of the wealthy and the corporations. Part of the neo-con “big picture” is to bankrupt government. Yes, they are insatiable in their personal greed, but they also know that the reduction in revenues makes it easier to reduce regulatory oversight (how’s that peanut butter?) and social programs (condoms anyone?). As Thom Hartmann points out, they want corporations to be able to “externalize” many of their costs and liabilities and then disable WE THE PEOPLE from being able to recover those costs. And thank you, EZRider, for putting WE THE PEOPLE back into the dialog. Lest we forget, that’s who government is supposed to serve.
You know the worst part? All these clowns — Bush, Greenspan, Thain — they all get to walk. You know, close the door and walk away. Meanwhile we pay for their “mistakes”. I say hang them all.
To Don Norris 1/30 6:35pm- Not 27%, 2.9 per cent. I imagine that number up is based on the 3% that Social Security and medicare are said to cost to administer.
TJ at 1/31 9:08 has the greater truth of it. As in Grover Norquist’s famous comment about not wanting to outlaw government. He just wants to “shrink it to the size that (he) can drown it in a bathtub”. They do that by making Government BE the problem (Iraq, Afghanistan, Katrina, Pregnant Chads, (hyping) Roe v. Wade, eColi, potholes, falling bridges and failing schools) hoping that we too will want to drown it. That leaves all the services to be done by their corporate buddies at a profit (not just 3 percent by any means), that WE will pay.
Republicans don’t mind taxes so long as they are paid by the middle class and the poor. They don’t like our fiscal overlords being bothered by taxes. In their Feudal visions for society the rich will contribute the crumbs off their feasting tables and the middle class and the poor will pay for the feast.
Is President Obama’s original American Recovery and Reinvestment Plan online in a more detailed description of proposed expenditures? If so, please tell me the address for it. Is the House Stimulus Package online? The Senate’s?
There’s precedent for the House proposal.
When George Bush proposed his hefty tax cuts during the 2000 elections, analysts thought that the numbers didn’t add up properly: the costs would be far higher than Bush let on.
After some give and take, the tax professionals discovered that Bush didn’t make commensurate AMT cuts, so that, “As a result, a substantial portion of the income tax cuts his plan seems to promise to taxpayers currently in the 28% through 36% tax brackets would be obviated by the AMT.”
http://www.ctj.org/html/bush0800.htm
Ignoring the AMT is a tried and true method of focusing the revenue reductions on the very top income groups.
Up for everyone BUT the rich, that is. Big surprise.
I’ve got news for you, all your taxes are going up. When you pass a “stimulus” bill the size of this, it is my and your money they’re spending. Would you spend YOUR money on some of this dumb stuff? Are you willing for your children and grandchildren to pay it off for us? It would be totally irresponsible to do this to them!!!!!
Keep the ” inheritance tax ” , repigs insistence of ” death tax ” which I consider a ” privilege tax” that really benefits Bush Jr when Bush Sr and Barbara pass . Stop any $ 3500 exemptions for dependents living outside of USA. Simple & logical
Some of you liberals are so hateful and slanderous in regards to your perception of the rich. You take for granted the high standard of living we have because you’re jealous of the wealth the rich has, most who earned it through hard work. Perhaps you’d rather live in peaceful poverty like in Europe where unemployment flutters between 10 and 15% and where your opportunities are limited. Their standard of living is lower because their high taxes and big government regulation stifle their economy. The same thing happened with Japan in the 1990s where they tried for a decade to pass stimulus spending bills that did nothing to create wealth. The 2001 tax rebates failed to have any sort of economic impact because rebates don’t create incentive to work, save, and invest. With the 2003 tax cuts, the economy boomed so much that it hit its peak in August 2006 when the most Americans ever were employed. Bush failed in that he spent like a liberal and expanded the size of government tremendously. It is unfortunate the way it worked out but this stimulus bill isn’t the solution. Beyond being a spending bill for interest groups and government hybrid cars, etc, only three percent (30 billion) for the infrastructure and job creation part. Obama says 3 million jobs will be created, which, with the spending were doing, averages out to $275,000 per job, while the average family earns $42,000. Also, the provision to make sure that illegals didn’t get hired by construction workers was shut down by the dems, so now were using American tax money to give illegals jobs. Fun, I can’t wait to pay for that. Judging from how Hoover’s and FDR’s spending failed (fact: the depression ended the war, the New Deal extended it and watched unemployment continue to sky rocket to 25%), I just don’t feel that this is the way to rescue the economy.
It’s not just “tax cuts for the rich” as liberals continue to spout out. It’s just not that simple. The reductions help small businesses tremendously by allowing them to keep their head above water, higher more workers, and invest in their own future. Their the backbone of the American economy and raising taxes limits them tremendously. We also know that taxing the rich doesn’t work either. Clinton tried it, and it failed, and thus the luxury tax was repealed in 93′. Clinton got free trade right though, and this whole situation with the steel company for example, people are only looking at the immediate benefit, which is that the steel company does better. But you completely ignore the fact that they operate at a higher cost, so every other American company that uses their products now has their costs increase. And what do they do? They lay off workers. It’s easy to just want everyone to be just as rich as the other, and its nice to just want the poor to stop being poor, but people naturally function out of their own self interest, and so you have to use the system that may not be perfect, but works the best. Socialistic agendas have never worked and they never will.
PS: I’m socially a liberal and an agnostic, but I can’t give my vote to a Democrat who wants to use the economic crisis as a platform to pass all of their socialistic legislation.